Dispute Board issues ruling on Gas-to-Energy project

Feb 04, 2025 News

…Gov’t, contractor given 28 days to take decision to arbitration

Kaieteur News-The Dispute Avoidance and Adjudication Board (DAAB) on Friday issued its ruling on the Gas-to-Energy (GTE) project, which binds the government and contractor to “confidentiality”.

In a statement on Monday evening, the Office of the President said, “On 31 January 2025, the DAAB issued their ruling on the matters referred to it. In relation to this ruling, the parties to the dispute resolution process are bound by certain rules of confidentiality.”

Dispute Board issues ruling on Gas-to-Energy project

A recent image of the GTE project site (Dispute Board issues ruling)

Government did not specify the details of the decision made by the DAAB, following a complaint filed on September 19, 2024. It only revealed that the Parties have 28 days to determine if they wish to refer the decisions, or any part thereof, to Arbitration, which would be the next stage in the dispute resolution process.

Government reminded that ExxonMobil was involved in preparatory works for the Wales, West Bank Demerara site where the 300-megawatt power plant and Natural Gas Liquids (NGL) facility are being constructed.

To this end, it explained, “The GOG will, therefore, in the next few weeks, in consultation with its partners, including Exxon/Mobil, as well as relevant legal and technical advisors, determine the best course forward for GOG.”

Furthermore, government made it clear that priority is to ensure that project is completed in the shortest possible time and in keeping with contractual specifications, with a view to bringing the power plant and the NGL plant into operation and delivering the associated benefits to Guyanese as early as possible.

In addition to doubling the country’s current electricity generation, government said, “the completion of the project will facilitate other benefits such as a reduction in the cost of LPG cooking gas to households and businesses, and the realisation of domestic self-sufficiency with significant surplus for the export market.”

So far, the GTE contractor, Lindsayca/CH4 has submitted two claims to the DAAB. The first claim amounts to US$50M, reportedly related to cost overruns. Vice President Bharrat Jagdeo had blamed ExxonMobil Guyana Limited (EMGL) for the construction delays in the Wales gas plants. Jagdeo said that ExxonMobil was responsible for the site preparation, the road, the Materials Offloading Facility (MOF) and the lay-down yard.

“We were supposed to hand over the site to the contractor by June, we did not hand over the site, that is, Exxon did not hand over the site until September and it was still incomplete…so a three months delay,” he said. Guyana Shore Base Inc. (GYSBI) was contracted by ExxonMobil to complete the site.

Jagdeo further stated that the government decided to give the contractors an extension of three months (from the end of 2024), “that is why we are arguing that the plant must be completed by April of 2025, instead of end December 2024.”

The former Head of State said the GoG is at odds with the contractor over the delay period.

He explained, “That is where the three months we are arguing the three months delay on the project came. They want a longer period because the liquidating damages for not completing the project on time for the contractor, if they don’t complete the project on time, it’s over US$11M per month they have to pay in liquidating damages for delay on the project, so they are arguing they need more time beyond the three months. We are saying three months is adequate.”

Meanwhile, it was reported that the second claim made by the contractor relates to issues relating to the soil. Jagdeo said, “There have been some additional claims by CH4 and Lindsayca, particularly as they relate to the soil conditions and those would have to go through the technical process to see whether they are justified or not.”

(Dispute Board issues ruling on Gas-to-Energy project)

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arbitration, confidentiality, DAAB, gas, GTE, RULING

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